Asset Management | FJG/FYI

A Special Market Commentary

by Patrick Thornton
Director of Investment Services

Stock markets around the world have been experiencing heightened volatility and declines over the past few weeks. Conventional wisdom says what goes up, must come down. But even if you view market volatility as a normal occurrence, it can be tough to handle when it is your money at stake.

The volatility the market has experienced over the past few weeks is not so surprising following the prolonged period of stability and low volatility enjoyed over the past couple of years. One thing to keep in mind is that 10% corrections on an intrayear basis were commonplace up until the past several years. These corrections can be expected, and may actually be healthy for the market.

As the market has continued its decline the last few weeks, it is easy to become too focused on day-to-day returns. At times, you may be tempted to change strategies when the markets get volatile. However, changing a long-term plan based on short-term results runs the risk of locking in losses as well as sacrificing the potential for higher returns. Instead, stay focused on your long-term investing goals.

As many investors have learned the hard way, becoming overly optimistic about investing during good times can be as detrimental as worrying too much during the bad times. The right approach during all kinds of markets is to be realistic. Have a long-term plan and strike a comfortable balance between risk and return.

Of interest is an article written by Ernie Ankrim, Ph.D., Chief Investment Strategist of the Russell Investment Group entitled, "2008 and the Rip Van Winkle Strategy: Eight Reasons for Second-Half Growth and How to Stay Calm Until Then" Please take the time to read the article as Mr. Ankrim does an excellent job in helping us understand the dynamics of the financial markets at this time.

We stand ready to answer questions about your portfolio and strategy at any time. Please do not hesitate to contact us.

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